Sunday, March 26, 2017

Side-by-side Comparison of NOC and Impeachment

Apotex Inc v. Shire LLC 2016 FC 1099 Tabib J
            2,547,646 / lisdexamfetamine dimesylate / VYVANSE

I’m still working on my post on the very interesting, but very long, damages decision in Airbus Helicopters v Bell Helicopter 2017 FC 170. I hope to post about it on Wednesday morning. In the meantime, while I don’t usually blog on procedural issues, this decision by Tabib J provides an  interesting side-by-side procedural comparison of an NOC proceeding and an impeachment action.

Apotex brought an NOC application in respect of a generic version of Vyvanse, and in response Shire applied for a prohibition order. Ten days later, Apotex brought an action seeking a declaration that the 646 patent is invalid and not infringed [2]. Shire then brought this application to partially consolidate the proceedings, with a common hearing on viva voce evidence, but subject to the parties’ ability to argue the admissibility or relevance of evidence to one or the other proceeding, in light of the different burden and the fact that the allegations in the NOC application are circumscribed by the NOA [3]. Apotex resisted, arguing that it would be disadvantaged in several ways, one being that if the NOC proceeding and the declaratory action were heard together, this would de facto, though not de jure, erase the difference in the burden of proof applicable to each proceeding “effectively robbing Apotex of the advantage it enjoys in the prohibition proceeding” [17]. Tabib J rejected Apotex’s arguments, and ordered the proceedings to be consolidated in the manner suggested by Shire. The decision generally is of interest for its detailed discussion of the procedural differences between the types of proceedings, and the implications for expense and strategy.

With that said, I can’t resist commenting on one point. Tabib J did not accept Apotex’s argument that when the court was relying on a common evidentiary record, the court “might be unable or unwilling to properly apply the burden of proof, or that it might be unwilling or unable, where the application of the evidentiary burden requires it, to reach a result which is not uniform but is nevertheless appropriate to each process” [19], saying that there was no evidence for authority for this proposition. I note that in Gleevec, in which, as Tabib J noted [13], an NOC proceeding 2013 FC 142 and declaratory action 2013 FC 141, were consolidated on consent [13] (see here), Snider J dismissed the impeachment action, holding the key claims not to be invalid. She consequently granted the prohibition order, saying simply that “it follows that the allegations of invalidity contained in the NOAs cannot be justified” [2013 FC 142, 7]. This suggests there may be some basis for Apotex’s concern, because Snider J did not find it necessary to decide whether the allegations of invalidity in the NOC proceeding might be justified, if considered in light of the fact that the burden is on the patentee rather than the generic in the NOC proceeding. 

Even if Apotex's concern has more merit than Tabib J was willing to accept, I don’t know that it would have affected the outcome, as Tabib J held that the partial consolidation proposed by Shire “would lead to very significant savings of time and expense for both parties, [and] represents the most efficient and judicious use of the Court’s resources, eliminates wasteful duplication.” [25]. She also noted that

It was Apotex’s decision to trigger both proceedings at the same time that makes the litigations particularly taxing, but it is also that decision which makes the partial joinder possible and necessary to alleviate the burden. Apotex cannot impose its own schedule on Shire and on the Court while at the same time resist reasonable and just means to make the most efficient use of scarce judicial resources, all for the sake of preserving its own perceived tactical advantage” [27].

While that was explicitly only an observation, and not the basis for her decision [26], it’s a strong point, and it seems to me that Apotex would have had to make a case for some kind of significant procedural or substantive injustice in order to have been able to successfully resist the order for consolidation.

UPDATE: Tabib J's decision was affirmed 2017 FC 139 Strickland J

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